Monthly Archives: October 2013

As reported in September, growth within the luxury industry is beginning to stabilise in the single digits to early-teens, after several years of ballistic double-digit increases.

“The hypergrowth of recent years was destined to moderate,” confirms Claudia D’Arpizio, a Bain partner in Milan and lead author of the 12th Edition of the Luxury Goods Worldwide Market Study. “The silver lining for luxury brands is that they can now change their focus from keeping up with the present to planning for the future.”

Overall worldwide, luxury goods spending is expected to grow by 2% to €217 billion (at current exchange rates) during 2013, as challenging economics in Europe continue and as operations in China shift from market expansion to network maintenance.

Though the report is quick to mention that, at constant exchange rates, market growth would have reached 6% for the year, compared to five percent in 2012. The devaluation of the yen is responsible for over half of this year’s gap.

The Americas region is estimated to grow at 4% in 2013 versus 2012, surpassing the estimated 2.5% growth rate for China, driven in part by a steady pace of store openings in second-tier cities in the U.S.

Another part of this growth is from the increasing number of Chinese tourists now spending in cities such as Las Vegas and Los Angeles. Overall, Chinese consumers have increased from 25% to nearly 30% of the luxury market, including local luxury consumption, and purchases made by tourists abroad

2% growth is expected in Europe, with increasing spending by tourists counteracting slower spending by European nationals. Tourist spending now drives half of revenues in Italy, 55 percent of revenues in the U.K., and 60 percent of revenues in France

Though Japanese consumption increased by 9% after a long period of stagnation, sharp depreciation of the yen imposed a steep penalty on the final revenues for luxury brands. As a result, Japan is expected to decline by 12%.

Mainland China will grow at 2.5%, whilst Greater China (including Hong Kong and Macau) will increase by 4%, as the cities increasingly capture Chinese spending as the nearest-to-home touristic markets.

“ Southeast Asia has become the rising star of the Asia Pacific region, with growth of 11% ”

Southeast Asia has become the rising star of the Asia Pacific region, with growth of 11%, not only in its historic core of Singapore but also in Malaysia, Indonesia, Vietnam, and Thailand.

The Middle East remains relatively strong, with 5% growth. Sales remain strong in Dubai as well, while Saudi Arabia is also gaining share to become the region’s second largest luxury market.

Africa is increasingly demonstrating its attractiveness as a high-potential region, with 11% growth and expansion into new markets such as Angola and Nigeria beyond its traditional strongholds of Morocco and South Africa/

Legoland Dubai is set to open in 2016 with global leisure parks giant Merlin Entertainment revealing fresh plans for the theme park.

The park was first proposed in 2008 at a site within the wider Dubailand project, but was put on the backburner in 2010 amid the financial crisis.

However, in a prospectus released on Wednesday ahead of its debut on the London Stock Market next month, Merlin said it planned to open Legoland Dubai in 2016 under a deal in which it would be funded by third parties, including Dubai’s Meraas.

“The group has also entered into an agreement with, amongst others, Meraas Malls and Hospitality LLC to develop and operate Legoland Dubai under this operating model, with launch planned for 2016,” Merlin said.

It added: “The initial development and construction of Legoland Dubai is being funded by third parties. Merlin has the right to manage and operate the park for an initial term of 25 years, once open.”

The contract was signed in 2012, the prospectus information said.

Merlin said the launch of the project would boost its efforts for geographical diversification, which was part of the group’s growth strategy “that the directors believe will, over time, reduce the effects of seasonality on the Group’s business”.

However, it said the strategy to expand its operations into new countries and regions, which also included Japan and/or South Korea, over the longer term, China, and further into the US increased its risk exposure as a result of any change to laws and licensing regimes.

In 2008, Legoland Dubai was slated to cost AED912m ($248.28m) and occupy a total of three million square feet. No new details of its cost were given in the prospectus.

Merlin operates 99 attractions in 22 countries, including brands such as Madame Tussauds, the London Eye, Legoland Parks, Legoland Discovery Centres and Sea Life.

Merlin said 20 to 30 percent of its shares would be sold in the $323m offer when it hits the London Stock Market next month.

Merlin said Blackstone, CVC and KIRKBI, a Danish family-owned holding and investment company which owns 75 percent of the Lego Group, would sell a portion of their shareholdings in the float, though KIRKBI intended to remain a long-term major shareholder.

In 2012, Merlin recorded 54m visitors, generating total revenue of £1.07bn ($1.73bn) and underlying EBITDA of £346.0m ($557.97).

Nick Varney, Merlin CEO, said: “We believe that Merlin Entertainments has bright prospects for the future and, as we said in our intention to float announcement, the listing will provide us with the platform for our next stage of development.”

The founder of homewares retailer Dunelm, Bill Adderley, has been revealed as the biggest private investor in Marks & Spencer.

New stock market filings show Mr Adderley has built a 3pc stake in M&S, worth £244m at Thursday night’s closing share price.

It is understood that the Leicestershire-based tycoon started buying M&S shares last year, but his investment was only disclosed on Thursday after Mr Adderley’s stake crossed the 3pc benchmark.

Mr Adderley’s investment is a vote of confidence in the turnaround plans for M&S being led by Marc Bolland, its chief executive.

M&S is scheduled to post half-year results on Tuesday, which are likely to show another drop in clothing sales but a sharp rise in food revenues.

Mr Adderley and his wife Jean founded Dunelm thirty years ago with a market stall selling home textiles in Leicester. Today the company is the biggest homewares retailer in the UK, with 135 stores branded as Dunelm Mill.

Mr Adderley handed day-to-day control of Dunelm to his son, Will, in 1996. He is no longer on the board but acts as the life president.

The Adderley family still own more than half of Dunelm, despite the fact the company is listed. Earlier this year, Mr Adderley was estimated to be worth £1.1bn.

Shares in M&S spiked on Thursday after Mr Adderley’s investment was revealed. The retailer eventually closed up 10.3, or 2pc, at 503½p.

M&S and Dunelm declined to comment on Mr Adderley’s investment.

The retailer has already increased in value by 30pc this year on the back of takeover rumours and hope in the City that its sales performance will improve.

Earlier this week, the company revealed the details of its Christmas advertising campaign. M&S will next week launch television adverts for its food and clothing range featuring Helena Bonham Carter, Rosie Huntington-Whiteley, and David Gandy.

Market share data from Kantar suggests M&S is making progress, albeit slowly, in attracting customers to its autumn and winter clothing.

The company’s market share in womenswear fell by 0.2pc in the 24 weeks to the of September, smaller than the 0.5pc drop reported for the prior period.

New York — Bloomingdale’s longtime chief executive and chairman, Michael Gould, 70, is stepping down after 22 years on the job. He will be succeeded by Tony Spring, 48, currently Bloomingdale’s president and COO, effective Feb. 1, 2014. A successor to Spring as president of Bloomingdale’s is expected to be named in 2014.

“Mike Gould has been an outstanding and inspirational leader who has strengthened Bloomingdale’s position as an upscale fashion trendsetter known and loved by customers around the globe. Bloomingdale’s truly is like no other store in the world,” said Terry J. Lundgren, chairman, president and CEO of Macy’s, parent company of Bloomingdale’s. “Tony Spring also has been an integral part of Bloomingdale’s formula of success for 26 years, and we are excited about his new, elevated role leading this exceptional omni-channel brand going forward.”

Gould, who joined Bloomingdale’s as chairman and CEO in 1991, told The Associated Press that he felt it was time to pass the baton and that he had been thinking about leaving for the past seven months. He started succession planning 10 years ago with his eye on Spring, the report said.

Prior to joining Bloomingdale’s, Gould was president and CEO of Giorgio Beverly Hills, a position he had held since 1987. He joined Giorgio in 1986 as president and chief operating officer.

Gould began his retailing career at the Brooklyn-based Abraham & Straus division of Federated Department Stores, Inc. in 1968 as an executive trainee and rose to become a merchandise VP.

Spring was promoted to Bloomingdale’s president and COO in 2008, with responsibility for Bloomingdale’s stores, marketing, creative services, finance, operations and restaurants. He began his Bloomingdale’s career in 1987 as an executive trainee in the White Plains, N.Y., store. From there, he went to assume positions of increasing responsibility.

Esprit Holdings Ltd. (330), the clothing retailer rebuilding its brand, jumped the most in almost a year in Hong Kong trading after hiring a former Zara executive to manage product creation and design.

The stock rose as much as 7.8 percent to HK$14.1, headed for the biggest gain since Nov. 15, 2012, after saying it appointed Rafael Pastor Espuch as chief product officer.

The company in September predicted a return to profitability in the fiscal year ending June, after reporting its first annual loss since a 1993 listing amid a revenue slump and competition from Inditex SA (ITX)’s Zara and Hennes & Mauritz AB. (HMB) Retail sales in Europe, Esprit’s biggest market, jumped 5.6 percent in local currency terms in the three months through September as stores performed better.

“Esprit has put a strong management team in place,” Tanuj Shori, a Hong Kong-based analyst at Nomura wrote in a research note published today, “We estimate that it would still take several quarters, or even years, to overhaul the entire supply chain.”

Pastor worked for 18 years at Zara, according to a statement from Esprit to Hong Kong’s stock exchange yesterday. Inditex is the world’s biggest clothing retailer.

Pastor will join Jose Manuel Martinez Gutierrez, who also worked at Zara before becoming Esprit’s chief executive officer. The Hong Kong company that makes 79 percent of its sales in Europe lost two top executives in 48 hours in June last year.

Retail Shift

Pastor replaces Melody Harris-Jensbach, who quit earlier this month and will be a consultant on several projects next year.

While Europe retail sales improved, Esprit yesterday posted a 5.2 percent decline in fiscal first-quarter overall revenue to HK$6.55 billion ($845 million), according to a separate filing to Hong Kong’s stock exchange. The decline was largely because of a 14.5 percent drop in retail sales in Asia, the company said.

Esprit was helped in Europe by its “shift from the wholesale to retail-driven model,” said Nomura’s Shori. Comparable store sales, which strip out the effect of newly opened locations, rose 1.6 percent for Esprit’s retail operations in its fiscal first quarter.

The stock traded at HK$13.76 as of 11:50 a.m. Hong Kong time. It has advanced 28 percent this year, compared with a 1.7 percent gain for the benchmark Hang Seng Index.

Harris-Jensbach will leave Esprit on tomorrow to pursue “new and broader” opportunities, the company said in a separate filing last week. Pastor will start as chief product officer on Nov. 4.

Starbucks has appointed Pizza Hut’s Mark Fox as the chief executive of its business in the UK.

Due to join Starbucks on 6 January 2014, Fox has over 20 years experience in retail and franchise operations. His most recent role was chief executive at the Yum Brands owned Pizza Hut. Prior to that he worked with catering and hospitality group Compass.

In his new role, Fox will succeed Kris Engskov who was promoted earlier this year to the position of president of Starbucks EMEA.

Commenting on the announcement Engskov said: “We are very pleased to welcome Mark to Starbucks. This is an exciting time for the UK business as we evolve our growth model to accelerate our growth in this critical market. Mark’s prior experience couldn’t be more relevant in supporting where we are headed at Starbucks.

“He has an impressive track record of delivering growth in the competitive retail markets, and I am greatly looking forward to working with him as we continue to drive the UK business into profit.”

Shop Direct, the owner of Very.co.uk, Littlewoods.com and isme.com, has reported its first pre-tax profit in ten years.

In the year to 30 June 2013, the group made a pre-tax profit of £6.6 million compared to a loss of £57.7 million in the previous year. While group sales edged up 1% to £1.69 billion, Shop Direct’s newer brands Very.co.uk and Isme.com delivered an 18% increase in sales. This offset a combined drop of 7% at the group’s more established brands Littlewoods.com and KandCo.com.

Shop Direct said that 78% of sales were completed online during the year, up from 75% in 2012. In addition, 27% of all online sales were made on mobile devices with the figure rising to 38% for the first quarter of 2013/14. As a result, the number of printed catalogues distributed was more than halved during the year – to 4 million from 8.2 million in 2012.

The group’s best performing categories were electrical and seasonal products, driven by strong sales of tablets, computers, small domestic appliances, gifts and beauty products.

During the year, brand ambassador Fearne Cotton expanded her collection for Very.co.uk to include furniture and homewares while Myleene Klass added lingerie and swimwear to her clothing range.

The group also signed up Mark Wright as the face of Littlewoods own brand menswear range Goodsouls.

Shop Direct chief executive Alex Baldock said: “These results mark an important milestone in the journey of Shop Direct into a world class digital retailer. We’re delighted to report a positive pre-tax profit for the first time in 10 years, giving us a solid platform from which to move forward.

“We have a new level of ambition and have set out a clearly defined and disciplined strategy for the continued evolution of Shop Direct, with world class personalisation at the heart. Our new corporate brand reflects this sharp focus and our confidence in the continued digital development of the business.

“We occupy a unique position in the UK’s digital retail market by making good things easily accessible to more people, and are proud of the part we play in our customers’ lives. Our attention and energy are now fully focused on delivering a great Christmas for our customers as we enter the busiest and most important trading period of the year.”

Mr Price Group Ltd. advanced to a record high after the South African clothing and furniture retailer said earnings climbed 18 to 22 percent even as household budgets tightened.

The shares rose as much as 2.4 percent to 152 rand, the highest since Bloomberg began compiling data on the company in 1990, and traded 2 percent more as of 3:47 p.m. in Johannesburg. The stock has gained 8.1 percent this year, compared with a 3.7 percent decline in the 11-member FTSE/JSE Africa General Retailers Index.

Earnings per share excluding one-time items advanced as much as 22 percent for the 26 weeks through Sept. 28, compared with 35 percent in the corresponding period a year ago, the Durban, South Africa-based company said in a statement.

Consumer confidence in Africa’s largest economy dropped to a 10-year low in the third quarter as strikes hit the manufacturing and mining industries and gasoline costs soared to a record.

JCPenney ex-CEO Ron Johnson is lashing out at his critics after more than a year of being beaten up in the press and wholly blamed for the retailer’s spiraling revenue losses.
Johnson told Forbes reporter Barbara Thau via email that criticisms of his tenure at JCPenney have been “lacking in depth, largely inaccurate and surprisingly uninformed.”

Johnson was fired in April after less than two years at the helm of the department store. His decision to change the store’s pricing strategy has been blamed for the chain’s catastrophic losses, which haven’t stopped spiraling since he left.

In the most recent quarter, JCPenney posted a net loss of $586 million, or $2.66 a share, and same-store sales were down about 12% from the previous year.

The BHS department store chain, owned by Sir Philip Green, has been sized up as a potential takeover target by South African billionaire Christo Wiese.

The chain is one of several retailers on a list of possible British acquisitions being considered by Wiese, who has a personal fortune of £2.2 billion. He has formed an alliance with former Asda chief Andy Bond, who has been given the task of finding possible British acquisitions.

Other British groups being considered are understood to include at least one of the pound store chains, which have grown rapidly since Woolworths collapsed in 2008.

Wiese is chairman of South African retail giants Pepkor and Shoprite and is the largest shareholder at both groups.

His representatives have visited the UK on at least one occasion this year to review possible targets.

A source close to the situation said: ‘Deals are starting to happen in the UK and Christo does not want to miss the opportunity if it’s there, whether through an intermediary or not. He knows the UK and there are plenty of chains here that would fit into his group of shops. BHS is one of those. The internet means retail is global now.’

Pepkor has a number of budget retail chains – including South Africa’s Ackermans and Australia’s Best & Less – mainly selling clothing, footwear and home products. Annual sales at the group are £1.3 billion and 72-year-old Wiese is listed in Forbes as the sixth richest man in Africa.

Sources were unable to say if any of the plans had advanced in recent weeks and no formal approaches have been made to possible targets.

BHS is closely integrated into Green’s Arcadia business empire, which would be an obstacle to it being sold – even if he decided to do so.

Green, a billionaire thanks to huge dividend payments from his retail businesses, is implementing an action plan to turn round BHS, which has struggled since the recession.

He also owns Topshop, which he has turned into a global success and recently reunited with Kate Moss to design a clothing collection.

Wiese has been closely involved with British retailing before. He once controlled Poundstretcher and was the driving force behind discount group Brown & Jackson.

Senior sources said the recent improvement in consumer spending has raised levels of interest in the UK retail sector, with potential investors keen to capitalise on the opportunity.

Several UK retail firms including high street giants such as House of Fraser and ecommerce firms such as Appliances Online, are examining the possibility of selling their businesses to new investors or floating on the London Stock Exchange.

Meanwhile, Bond played an integral role in the Walmart acquisition of South African retailer Massmart when he was at Asda, which is owned by the US giant.

He is understood to have made a number of trips to South Africa since he left the Walmart group in 2011.

He also set up an investment firm targeting UK retail assets and has high-level links to strategic consulting and the investment banking industry.

Wiese, who on Friday was in Spain on business, did not respond to phone or email messages left with his office last week.

Bond, who was chief executive at Asda between 2005 and 2010, and Sir Philip Green both declined to comment.

The Griggs family has sold its boots brand Dr Martens to private equity group Permira for £300m

It is arguably one of the most famous shoe brands in the world, enjoying associations with a wide variety of sub-cultures, from the rebellious Mods to the more mainstream Miley Cyruses of the world. But as of yesterday Dr Martens no longer enjoys the status of being a family-run firm.

The R Griggs Group Limited, headed by Dr Martens founder Bill Griggs, has been acquired by Permira Funds for £300 million. The deal will be completed in January 2014.

The Permira group acquired a stake in Italian fashion label Valentino in 2007 and controls German label Hugo boss

Under Permira, Northampton-based Dr Martens plan to open more stores and develop more styles after seeing strong growth in Europe, the US and China.

In 2012, Dr Martens posted sales of £160.4m and a pre-tax operating profit of £22.9m, which is expected to grow to more than £30m this year.

David Suddens, CEO of Dr Martens, said: “The brand’s authenticity and the millions of customers who have used Docs as a symbol of self-expression for over half a century are what makes Dr Martens unique. The Permira Funds respect that heritage, and want to support the management team in nurturing it.”

Abu Dhabi’s latest mall, which features the first House of Fraser department store outside the United Kingdom and Ireland, opened its doors yesterday.

World Trade Center Mall, located on the site of the emirate’s old Central Market, has 160 shops, more than 20 dining outlets and an eight-screen cinema.

The department store stocks more than 170 brands of consumer goods, some of which are available for the first time in the capital.

“When you look at Abu Dhabi, it is sort of underweight compared to Dubai in terms of shopping centres,” said John King, the chief executive of House of Fraser.

“Working with [regional franchise partner Retail Arabia International], we were able to bring some great European and international brands but also some great local brands as well.”

It is the first of several stores his company was looking at opening in the region, Mr King said.

Nabil Daud, the managing director of Retail Arabia International, said: “[The mall is] right in the centre of town and it’s also a minute away from the Corniche … really the heart of Abu Dhabi where all the businesses are.” He added that the partnership quickly signed up with the mall because of its location.

The mall also hosts shops and restaurants that are new to Abu Dhabi, such as the fashion brands Karen Millen and Missoni, as well as the eateries PF Chang’s and Nando’s.

The mall’s developer, Aldar Properties, hopes it will attract customers from across the emirate, but its primary target clientele are people living within a four-kilometre radius of the mall.

The mall is the third in three months to open in Abu Dhabi; Deerfields Townsquare, a long-awaited community shopping centre, opened last month, and The Galleria, an upmarket mall located on Al Maryah Island, did so in August.

On a global list of cities with the most retail space under development, Abu Dhabi ranks 10th, according to a report this year by the international property consultancy CBRE.

Nine such projects would be completed in Abu Dhabi from this year until 2017, establishing the emirate as a retail destination in the Middle East, CBRE said.

The projects – which includes Yas Mall, an Aldar Properties project which will become the UAE’s second-largest mall when it opens in March – follow a period of significant undersupply, when many malls in the capital were running at close to full occupancy.

Developers are rolling out more mall projects because it has realised that residents, particularly the most affluent, have been travelling to shop in Dubai at the weekends, according to analysts.

EVEN though local market conditions worsened and South African consumers came under increased pressure, Shoprite Group on Monday reported a 10.2% rise in turnover for the three months to September.

The growth was better than in the quarter to June but slower compared to the increase of 15.6% in the first quarter of 2012, reflecting the deterioration of South Africa’s consumer environment in which disposable income growth is being squeezed and access to credit has tightened.

The group’s South African supermarket unit, Shoprite’s largest division, grew 8.3%, compared with 12.2% in the same period a year earlier.

Noah Capital Markets’ retail analyst Roger Tejwani said: “Certainly things are sluggish but they are taking market share. We saw the Pick n Pay numbers recently and they were growing their turnover at about 7.5% and Shoprite’s came in with just over 10%,” he said. Shoprite will open 46 new supermarkets before December 31.

“Domestically, Shoprite are trying to keep momentum up on space growth, there is a little bit of a space race going on. Its difficult for Pick n Pay … they are probably coming up against a lot of competition on sites, their space growth is lower and it makes it harder to try get their market share back,” Mr Tejwani said.

The company’s supermarkets outside South Africa increased turnover by 29.1% and in constant currency terms, by 15.6%, supported by the opening of 14 new food outlets since October 2013.

“The fact that the non-South African business is still showing a decent level of growth is encouraging,” Mr Tejwani said. Thirteen of the countries in which Shoprite operates have a higher growth rate than South Africa has.

At the company’s annual general meeting on Monday, chairman Christo Wiese said Pepkor Group, of which he is also chairman, was considering acquisitions in UK.

Mr Wiese said BHS, the chain of department stores owned by billionaire Philip Green, “may well be one that we end up looking at.” The Mail on Sunday reported that Mr Wiese had tasked former Asda Group CEO Andy Bond, to seek out potential UK acquisitions.

Separately, Shoprite, which is seeking to reverse the purchase of shares by mainly Zambian pension funds on the Lusaka Stock Exchange, will return to court on November 25, Lusaka High Court judge Flavia Chishimba said.

Shoprite is suing Zambian shareholders who bought the stock from 2003 to 2011, saying its local representative sold shares at a discount outside its mandate.

Barr Construction has secured a contract to create the new 30,000sq ft Waitrose store in Chester, Cheshire.

The announcement comes ahead of the opening of the new Waitrose Helensburgh, which was on target to open its doors to the public on 24 October 2013, following a successful construction and fit out by Barr.

Derek Simpson, operations manager at Barr, is looking forward to continuing the partnership with the retailer. He said: “The Chester contract win is a testament to our track record of delivering stores for the major retail chains over the past 20 years.

“As the first Waitrose we have handled all construction and fit out activity for, the Helensburgh store has been a flagship project for Barr.

“On the back of the Helensburgh opening, it is especially pleasing to announce our second construction and fit out project with the retailer.”

Waitrose director of development, Nigel Keen, said: “We have quickly established an excellent relationship with Barr and are looking forward to building on that success with our new shop in Chester. They have a clear understanding of our brand values and the high standards we deliver to our customers.”

The Chester store will be Barr Construction’s fifth Waitrose project in the UK, following projects in Helensburgh, Stirling, Walton-Le-Dale and Newton Mearns.

Monday, 28 October 2013 Topshop has come to France. The directional high street fashion retailer has opened a concession in Paris’ Galeries Lafayette department store. The concession features near 2,000 square feet and on display are Topshop’s core fashion collections, including Topshop Unique, shoes, accessories, make-up in addition to its collaborations and more premium lines.
Topshopowner Sir Philip Green stated: “I walked the space myself earlier this month when under construction and was impressed by the location, energy and diversity of great brands within the store. We are all excited by the reception Topshop has been given [in] recent launches in other European cities, such as Amsterdam, Berlin and Munich.”

Paris as a fashion capital is key for Topshop

“However, with Paris being such an important fashion capital, we are hopeful that this opening will be the jewel in the crown, and the start of the journey to bring Topshop to even more fashion lovers with our partners at Galeries Lafayette.”

Meanwhile, Hollywood actress Kate Bosworth has teamed up with Topshop again to create a capsule winter wardrobe collection.

Described as the perfect mix between masculine and feminine, oversized and fitted, the collection was created by Topshop’s in-house design team with Bosworth as design consultant.

“The collection is tailored and classic. For fall, we wanted to create luxurious pieces with a strong minimalist approach,” says Bosworth. “Slim silhouettes are cloaked in a masculine shape, staying true to the mix of masculine/feminine balance that exists in my personal aesthetic.”

The 46-piece collection has landed in stores globally and online, priced 35-500 pounds.

Seattle — Starbucks is now offering gift cards that can be sent via Twitter. Under the company’s new “tweet-a-coffee program,” customers in the U.S. can sync their Starbucks account to their Twitter account and tweet to @tweetacoffee and the Twitter handle of the gift recipient, which will then send the recipient a $5 digital eGift.

“Starbucks is really breaking ground here,” said Joel Lunenfeld, VP of brand strategy at Twitter. “Shared experiences, such as a television show, a sporting event, or someone sharing a gift, are at the heart of the Twitter experience. It’s also central to what it means to be a modern brand.”

The digital eGift card is redeemable at participating Starbucks stores in the U.S., either by printing out the e-gift, showing it directly on their mobile device, or by loading it to their Starbucks mobile app.

“What’s so exciting about extending our eGifting platform to Twitter is the open and real time nature of the platform,” said Adam Brotman, chief digital officer, Starbucks. “Tweet-a-coffee allows us to do something quite different in eGifting in that people can now give the gift of Starbucks to anyone on Twitter in the moment. Tweet-a-coffee is a key next step as we innovate our social digital gifting offering.”

Starbucks first launched its eGifting platform in 2011 on Starbucks.com, and has extended the offer through Facebook, its iPhone mobile app and now through Twitter.

ALTHOUGH consumers in the middle-income sector, who represent the core of Clicks Group customers, have remained under pressure, the company has reported a 9.2% rise in full-year profit, which beat analyst forecasts.

Retailers have come under strain as tightened disposable income as a result of escalating living costs and debt has seen consumers shop less.

Without reducing its margin, Clicks continued to rely on promotional activity to drive sales. The company reported diluted headline earnings per share of 298.6c for the year ended August 31, from 273.4c previously.

A final dividend of 168c was declared, an increase of 10.5%. The BDlive consensus forecast was for diluted headline earnings per share of 295.9c and a dividend of 166c.

Clicks shares, which are primarily held by foreign investors, surged more than 8% to R60.70.

“Consumers are very cautious on spending. They’re spending when they have cash, so you’re seeing a great spike at month-end when people just get paid. We don’t know how they’re going to respond over the important festive trading period. What we do know is that selling price inflation will be held down,” CEO David Kneale said.

The Cape Town-based group reported a 13.6% increase in turnover to R17.5bn and net income grew 9% to R751.2m.

Daniel Isaacs, an equity analyst at 36One Asset Management, said: “They guided for an earnings range a while ago and they’ve come in at the top end of that, so (the) guys were pleasantly surprised. It’s not a strong earnings growth but with such a strained consumer and with what we’re seeing in the retail space, it’s better than expected, especially in the second half, where there was a pick-up.”

The chain grew sales by 8.6%, with stronger sales growth of 10% for the second half.

“We continue to see two trends — the switch to generic medicines up 16.1% and now accounting for over 40% of sales and an increase in self-medication,” Mr Kneale said. “Both are in part the result of efforts by medical aids and consumers to contain costs. We’re endeavouring to optimise these trends by actively switching patients to lower-cost generics, not least to our own Clicks and Unicorn brands and by prompting over-the-counter medicines.”

The group’s Musica chain saw comparable store sales rise by 5.9% in an environment where consumers are shifting their spending to digital formats. Fourteen stores were closed and three more will be shut.

According to professional services firm PwC, retail spending on physical formats will fall at a faster rate than spending on digital will rise, resulting in an annual decline in spending on recorded music.

Retail spending on digital music will rise at an estimated compound annual growth rate of 7.8% in the next five years and will total about R132m in 2017, PwC said. Mr Kneale said there remained a market for physical product even if it was declining.

“We’ll gain market share as the last man standing. One of the growth areas of Musica is technology and accessories, which were up 38% in the last year — that’s speakers and headphones,” Mr Kneale said.

The Body Shop grew turnover by 11.3%, benefiting from four new stores. The group’s UPD wholesale pharmacy business increased turnover 43.9% to R11.5bn. Clicks will open 25 stores and 20-25 dispensaries in the year ahead.

Massmart will open the doors to three George pop up stores today, to give South African consumers a taste of the famous British brand of clothing.

Known for its quality and affordability, George is the fashion division of ASDA, currently Britain’s second largest supermarket chain and part of the Walmart family.

For the launch of this internationally-recognised brand, three temporary pop up shops have been set up at Cresta Shopping Centre in Johannesburg, Galleria Shopping Mall in Amanzimtoti and Cape Gate Shopping Centre in Cape Town. The pop up stores will showcase a limited range of clothing from George, giving South Africans a small taste of the brand, and its remarkable quality.

Massmart CEO Grant Pattison says this is a good initiative that provides an excellent example of how access to Walmart intellectual property has essentially enabled Massmart to rapidly and cost effectively identify a compelling clothing proposition from a pre-selected range.

“Part of being in the Walmart family means we can try new things with lower exposure to risk. Our customers have also called for a total shop – one store that offers everything, this provided the perfect opportunity to do this,” Pattison says.

“This is a proven, good quality and affordable brand that benefits from the input and expertise of buyers with extensive experience in clothing. Access to this expertise makes it easier to develop a competitive local offering,” he said.

All three temporary stores will be running for up to three months or until stocks last. This however does not mean that George will come to an end, from the end of November, George baby clothes and George essentials (socks and underwear) will be available at Game, while Makro will stock the babywear.

Over the past two decades, George has developed into a household name in the UK, says Keren Long, George Brand Development Director. “We have built up incredible trust with our customers, and cemented a robust reputation for offering quality, stylish clothing at incredible value for money. It is this proposition we are hoping to bring to our South African consumers.”

All exchanges and returns for items purchased from the temporary stores can be made at Game stores. Massmart will approach the continued rollout based on the success of the range.

The private equity arm of Dubai Holding, which is owned by the emirate’s ruler, is planning to sell its minority stake in a luxury retailer backed by Swatch, four banking and industry sources aware of the matter said.

The unit, Dubai International Capital (DIC), is in exclusive negotiations to sell its 18 percent stake in Rivoli Group to Saudi-based Al Rajhi Capital, the investment banking and private equity arm of the kingdom’s top listed lender, Al Rajhi Bank , the sources said.

The sources, who spoke on condition of anonymity, did not provide a potential value for the deal.

Swatch, the world’s biggest watchmaker, owns a 40 percent stake in Rivoli, which has more than 300 outlets across the Gulf Arab region and also operates boutiques on behalf of Mont Blanc, Dunhill and Vertu, among others.

The discussions are at an advanced stage and the two parties expect to complete a deal before the year end, two of the sources said. The talks could still falter and no agreement has been reached, they added.

“It’s a pretty good business and luxury retail is a big play in Dubai. The negotiations are at an advanced stage and the two parties expect to close deal by year-end,” one of the sources said.

A spokesman for DIC in Dubai declined to comment. Al Rajhi Capital was not immediately available for comment.

Dubai, helped by a rebound in its property market, is recovering from a debt crisis in 2009 when several of its state entities were forced to restructure debt and seek more time for repayment.

The emirate, facing debt repayments of about $50 billion over the next three years, has been getting serious about selling off assets to raise money.

DIC, which restructured $2.5 billion in debts last year by agreeing to extend maturities for five years, has a portfolio that includes stakes in British engineering firm Doncasters Group, U.S. hedge fund Och-Ziff and German alumina products maker Almatis.

The firm sold hotel operator Ishraq Dubai to diversified firm Almulla Group in 2011 and also exited its 45 per cent stake in valve maker KEF Holdings.

It first bought a stake in Rivoli in 2007, while Swatch purchased its stake in 2008.

Other Dubai firms have been stepping up disposals as financial markets and valuations improve globally. A unit of Toronto-based investment firm Brookfield Asset Management bought logistics warehouse developer Gazeley from Dubai World subsidiary Economic Zones World (EZW) in June.

Meanwhile Dubai Group, another unit of Dubai Holding which is restructuring $10 billion in debt, sold its credit card business to Abu Dhabi’s First Gulf Bank for $164 million in June.

Fashion lifestyle brand Tommy Hilfiger has opened its first independent store in Moscow.

Housed in a historic building, the 197 square metre store at 7 Kuznetsky Most is situated in one of the Russian capital’s most prestigious shopping districts, close to the Bolshoi Theatre.

rpa:group, which provided the detailed architectural design support and design visualisation for the shop, said the store design had been developed to reflect the “sophisticated yet relaxed” Tommy Hilﬁger style.

Features include a blue patchwork carpet ushering shoppers upstairs to menswear and framed vintage covers from Life magazine adorning the walls.

A spokesperson for rpa:group said: “The overall look and feel is eclectic and welcoming and a true reﬂection of the brand’s laid-back chic merchandise.”

House of Fraser is expanding into the Middle East with the opening of its first international flagship store in Abu Dhabi this weekend.

Launched with franchise partner Retail Arabia International, the store in the World Trade Centre Mall will be the first international department store in the emirate. The newly developed mall is situated in the heart of Abu Dhabi’s commercial and financial district and is attached to the Central Market souq.

The House of Fraser store occupies an anchor 100,000 sq ft site spread over four floors and has a contemporary design. The store will stock the retailer’s premium offer of womenswear, menswear, childrenswear, accessories, jewellery, home accessories and beauty brands. The store will also feature a personal shopping suite, beauty rooms, a mother and daughter spa, and a personalised loyalty programme.

The shop is the retailer’s first flagship store outside of the UK and Ireland.

House of Fraser chief executive John King said: “The opening of our first international flagship store marks a significant milestone in the continued development of House of Fraser. The store complements our existing global presence through our leading online offer and is the first step in our expansion plan for the Middle East.

“With a unique British heritage, House of Fraser is famous for bringing together global and exclusive premium brands in the best possible shopping environment. We are excited to see how well the new store captures this ethos and brings our brand to life for our new customers, and look forward to working closely with our franchise partner to develop our brand offer in the Middle East.”

Accenture conducted an online survey of 500 U.S. consumers in September 2013. Based on their response, spending is expected to increase, consumers will be laser focused on discounts. While many plan to be finished with their retail shopping by the end of November, they’ll still be in the stores and online comparing prices (and aren’t afraid to return if they find a better deal).

The appeal of shopping on Black Friday is still alive and well. In fact, the highest in 5 years. With retailers opening doors early on Thanksgiving, many are starting to consider this as “part of the event”. Though almost half (41%) still consider this a time to spend with family and won’t be shopping.

After a tough year, consumers want to treat themselves and their families this holiday season. With an increase in discretionary income, shoppers will still be “sensible”. Some of the highlights of this year’s results include:

Shoppers will be spending more – up 11% in total dollars compared to 2012 ($646 versus $582); 62% plan to spend the same; 20% will spend more than last year – with 20% of those planning to spend $500 more.

Consumers will be shopping across channels with just as many people planning to webroom as they will showroom. For example, consumers will be comparing prices on their mobile phones while in store and they’ll be making purchases online, but picking up in store to avoid shipping costs.

Gift cards still number one on consumer’s shopping list – primarily purchased at the supermarket – with 40% for discount retailers and 34% for restaurants.

Black Friday is still a huge lure, in fact, at a 5 year high. 41 percent indicated that they will be out shopping between 6 PM Thanksgiving Day and 5 AM on Black Friday. With ‘doorbusters’ being the main draw.

While most people will still use their PC to make online purchases, there is an increase in the use of tablet and smartphones to make purchases. Though with the cost-conscious shoppers, they’ll primarily be shopping at discount stores and looking for discounts upwards of 30% throughout the season.

As the holiday shopping season approaches, retailers must be able to satisfy American consumers who, more than ever, want to shop on their terms and expect every step in the journey to be a seamless one, whether they are online, shopping in a store or using their phones. The list of consumer expectations of how they should be able to shop – from finding the same prices and promotions in a store as they do online to buying online and returning to a store – is getting longer every day. Increasingly, holiday-season winners will be defined by their ability to deliver a seamless experience to the consumer.

Following a successful collaboration with the Spring Summer and Autumn 13 collections, River Island is pleased to announce the release of the final Rihanna for River Island collection; Winter 13.

The 40-piece winter collection which goes on sale in stores and online on November 7th, consists of glamorous and sexy pieces with the entire collection just right for the party season. Oversized varsity jackets, matching tartan seperates, embellished party dresses, longer lined tuxedo jackets and denim jumpsuits are the key pieces in the range.

Tartans, denim, black and metallic inject the rock and roll edge to the range while the floral and soft fabric like velvets and faux furs present a softer side, the combination of soft and hard has been an underlining theme of the entire collaboration expressing strength and fearlessness.

The Limited Edition collection features black leather skinny trousers, black snakeskin embossed bra top, shorts and skirt, faux fur trucker and Cossack hats. With only 100 pieces of each item made and in line with all previous collections, they’re expected to fly off the shelves quickly.

As with SS13 and Autumn 13, collections will also be sold exclusively in the United States and Japan at Opening Ceremony.

‘We’ve had an amazing year working with Rihanna. She’s been an inspiration for our creative teams to work with and we’ve been constantly impressed by the amount of time and energy she’s invested in the project. Reactions to the collaboration have been very positive from fans around the world and we’re excited to see how they respond to her last collection for River Island’ Ben Lewis River Island Chief Executive

‘With River Island, I mean it was brand new in the beginning; they let me do whatever I wanted to do. I was inspired by so many things for the spring collection and I really got to get my hands dirty. For Autumn Winter, I really wanted to try and incorporate some of these ideas with different techniques.’ RihannaDownload the full press release here

Following a successful collaboration with the Spring Summer and Autumn 13 collections, River Island is pleased to announce the release of the final Rihanna for River Island collection; Winter 13.

The 40-piece winter collection which goes on sale in stores and online on November 7th, consists of glamorous and sexy pieces with the entire collection just right for the party season. Oversized varsity jackets, matching tartan seperates, embellished party dresses, longer lined tuxedo jackets and denim jumpsuits are the key pieces in the range.

Tartans, denim, black and metallic inject the rock and roll edge to the range while the floral and soft fabric like velvets and faux furs present a softer side, the combination of soft and hard has been an underlining theme of the entire collaboration expressing strength and fearlessness.

The Limited Edition collection features black leather skinny trousers, black snakeskin embossed bra top, shorts and skirt, faux fur trucker and Cossack hats. With only 100 pieces of each item made and in line with all previous collections, they’re expected to fly off the shelves quickly.

As with SS13 and Autumn 13, collections will also be sold exclusively in the United States and Japan at Opening Ceremony.

‘We’ve had an amazing year working with Rihanna. She’s been an inspiration for our creative teams to work with and we’ve been constantly impressed by the amount of time and energy she’s invested in the project. Reactions to the collaboration have been very positive from fans around the world and we’re excited to see how they respond to her last collection for River Island’ Ben Lewis River Island Chief Executive

‘With River Island, I mean it was brand new in the beginning; they let me do whatever I wanted to do. I was inspired by so many things for the spring collection and I really got to get my hands dirty. For Autumn Winter, I really wanted to try and incorporate some of these ideas with different techniques.’ RihannaDownload the full press release here

LONDON (Alliance News) – Global online clothing and beauty retailer ASOS PLC said that retail sales soared by 40% in the financial year ended August 31, boosted by strong international growth and an increase in active customer numbers.

The popular online fashion retailer for 20-somethings, reported retail sales rose to GBP753.8 million from GBP537.9 million a year earlier.

ASOS Chief Executive Nick Robertson said that ASOS will soon launch in China, with future international plans to explore other big economies like South America and India, after some time.

The group said that international retail sales accounted for 63% of total retail sales. It said that UK retail sales were up 34% to GBP276.0 million, while international retail sales were up 44% to GBP477.8 million, boosted by the recent launch of mobile services in countries like Russia, Germany and France.

ASOS said that during the year it strengthened its own-brand range in both womenswear and menswear, which accounted for 52% of sales over the year.

“We have started the new financial year positively. Our GBP1 billion sales target is now firmly in our sights, and we have stepped up our investment in people, technology, logistics and marketing to support the significant global potential of the ASOS business,” Robertson said in a statement.

The huge uptick in sales, led to a 37% increase in its full year pretax profit to GBP54.7 million, compared with GBP40.0 million a year earlier.

ASOS said that it has now reached its 7 million active customers worldwide milestone, up from 5 million users the year before.

Established on Bridge Street in Westport for more than 60 years, and with a current staff count of eight, the store which is owned by the second generation O’Donnell family, has undergone a complete re-fit of its 2,000sq ft store to incorporate all the key elements of the new totalhealth brand and store design.

Retail giant Pick ‘n Pay has recorded 24% growth in its online business, it noted in announcing its interim results ended September 1, 2013.

“We have grown Pick ‘n Pay Online into one of South Africa’s top online businesses, with turnover growth of 24% on last year and an increase in online shoppers of 15.8%. We are the first retailer in South Africa to offer 1 hour delivery time slots for groceries,” the group said.

Pick ‘n Pay said it was making 1,500 deliveries per week through its online facility – up 28% on last year – with registered customers up 16% since March.

The group offers a list of the areas to which it delivers on its website. The delivery cost is determined by address and time slot and starts at R60.

Overall, the group said that total till sales were up 8.1% to R35.0 billion, while turnover of R30.1 billion was 7.5% better than R28.0 billion recorded in 2012.

“We are serving more customers than ever before, increasing our customer count by 3.3% during the period, while processing 380 million transactions through our tills,” Pick ‘n Pay said.

Trading profit improved 34.8% to R317.5 million, with a dividend per share of 14.80 cents declared, up a fraction from 14.75 cents in 2012.

The group pointed out that its 2014 interim financial period consists of 26 weeks, which is two trading days fewer than the comparative period last year. It therefore presented its results on a comparable pro-forma basis.

“We opened 44 new stores across all formats during the period, and closed nine under-performing stores in order to maintain the quality of our offering.”

“We now have more than 1,000 stores, consisting of 594 owned and 433 franchise stores, across multiple formats and in eight countries,” Pick ‘n Pay said.

Coach is continuing to open new stores and grow its inventory in North America despite plunging sales of its luxury handbags in the region.
As we reported earlier, Coach saw a 6.8% decline in North American same-store sales during its first fiscal quarter that ended Sept. 28. and the company says it expects the negative trend to continue through the end of the year.

At the same time, Coach is increasing its square footage in the region by 7% through 20 new store openings and 20 expansions, including two new store concepts at flagship locations in New York and Southern California, executives said on an earnings call Tuesday.

In the most recent quarter, the company closed one full-price location and opened five discount stores, including one men’s store. There are currently 350 full-price locations and 198 discount stores in North America.

Analysts raised concerns to Coach executives on Tuesday about the expansion — as well as the company’s 6.5% growth in inventory in the most recent quarter compared to last year.

Coach CEO Lewis Frankfort said the inventory growth is necessary for Coach to succeed in transforming into a lifestyle brand by offering more than just handbags.

He specifically pointed to growth opportunities in men’s accessories and footwear as reasons to keep growing.

“We are continuing to drive our men’s business globally through new standalone and dual-gender stores and by dedicating more space for a broader men’s assortment in existing retail stores,” Frankfort said. “We remain bullish about the prospects of our global men’s business.”

Globally, Coach’s profit fell 1.6% in the most recent quarter, with net income dropping to $217.9 million — or 77 cents per share — from $221.4 million a year earlier.

The company is planning to expand its square footage internationally by 9% this year. Most of that growth will be in China, where same-store sales grew 35% in the most recent quarter over last year.

Retail leaders will gather to discuss sustainable development of retail in the Middle East at a two-day forum in Dubai.

The annual Middle East Retail Forum (MRF) and Images Retail ME Awards 2013 will take place at the JW Marriott Marquis on October 28 and 29 and is being sponsored by Line Investment, a subsidiary of Lulu Group.

The event is being organised by Images RetailME, a B2B publications dedicated to the retail sector in the region.

“MRF acts as a great platform bringing together retailers as well as representatives from the public sector to share values and vision to boost retail growth in the region,” said Nilesh Ved, chairman and founder, Apparel Group.

“Retail developments across the region are all over the news demonstrating the progress of real estate and economy in general. Today, leading developers are looking into the industry’s evolving needs and sustainability objectives. Majid Al Futtaim Properties looks forward to sharing its best practices at MRF,” said Dimitri Vazelakis, executive managing director, shopping mall at MAF Properties.

Over 750 delegates will attend the forum and the annual Images RetailME Awards 2013 will honour retailing excellence in the Middle East on the evening of October 28.

Nominations for the awards come in 24 categories including fashion, gold and jewellery; footwear and accessories; sportswear; children’s wear; beauty and wellness; pharmacy and healthcare; home and office improvement; consumer electronics; entertainment; leisure; luxury; food service; best marketing campaign; best social media campaigns; retail launch; store design; rising star; online retailer of the year; store manager of the year; CRM initiatives; responsible retailer of the year; international retailer of the year; and the Middle East retailer of the year. – TradeArabia News Service

French department store chain Galeries Lafayette opened its first store in Xidan, downtown Beijing, on Friday after downing the shutters on a previous store that was open for only one year. “Beijing is a totally different place compared with 15 years ago. The fashion market has been evolving very fast for the past five to six years and people here [in Beijing] have become more trendy and fashionable,” commented Laurent Chemla, chief executive of Galeries Lafayette (Beijing).

Beijing flagship is second biggest worldwide

The flagshipstore in Beijing is second in size and effort only to the one in Paris, having been planned and built for three years at a cost of 42 million euros. On six floors, the 47,000 square meter store houses more than 500 brands, among them Givenchy, Coach, Gucci and Prada and lesser known but popular Parisian labels like Delvaux, The Kooples and Maje.
Famously absent are brands like Cartier, Louis Vuitton and Chanel – partly to avoid the Chinese government’s crackdown on corruption in the luxury segment with the aforementioned brands having come under scrutiny – and partly due to Galerie Lafayette’s reorientation toward fashion rather than luxury.

“We are not a luxury store. We are a fashion store,” stated Philippe Houze, chairman of Galeries Lafayette at a news conference in the new store on Friday. He also admitted to “aiming at fashion addict customers” who “don’t care about corruption”.

The family-owned department store chain has teamed up with Hong Kong-based fashion distributor I.T Limited in a 50-50 joint-venture partnership. The Beijing store is the latest in a series of flagships in metropolises around the world, among them Dubai (opened in 2009), Casablanca in 2011 and Jakarta in 2013. Two more are planned in Turkey and Qatar by 2015.

Galeries Lafayette has been facing weak consumer spending in France and is thus targeting emerging markets, generating total revenues of 3.7 billion euros last year with 65 outlets worldwide.

99p Stores has revealed that its profits dropped 55% last year and said it is working on opening a transactional website. .

A report by Retail Week showed that EBITDA at the discounter was down £6m to £4.9m in the year to 31 January 2013. However, the fall was attributed to investment in buying teams, retail operations, IT, finance and HR to support its growing 231-store estate. Gross turnover was said to have increased 27% to £391m in the year, with gross profit edging down 0.28% in the face of rising raw material prices.

Commercial Director Hussein Lalani is quoted as saying: “Last year was a consolidation year in which we built infrastructure for continued growth and these results were in line with expectations.”

Lalani said since year-end “trading has been steady. We have seen year to date margin improvement of 1.4%”.

99p Stores is planning to open another 120 stores in the UK by 2017, aiming for a 350-store estate. Lalani added that there was scope for 1,000 UK stores and further expansion of its product offering having invested in chilled food distribution.

Meanwhile, the single price retailer revealed that it has invested in bringing all website design and development in-house so it can create its first transactional site. It was not revealed when the site would be launched but rival Poundland has also said it is working on a transactional online store.

Anyone who’s shopped from Liz Earle’s elegant website will be familiar with this little vignette: excitedly lifting the lid on a smart pastel turquoise box. Pushing through the stuffing to discover the treats you’ve purchased (probably with an exclusive web discount). Finding a little something extra – perhaps a new product sample or an extra muslin cloth for your cleanser. Making a mental note to store one’s jewellery/nail polishes/best stationery in said box, because it’s so pretty. Feeling smug with your exquisite little parcel and anointing yourself with all the delicious goodies.

That, dear readers, is why Liz Earle has just topped a poll for best online shop for the fourth year in a row. The survey, conducted by Which? on 14,000 UK consumers, found that Liz Earle’s chic website, discounts, personal touches, bonus freebies and quick delivery were key factors for reaching top spot. One member said: ‘It makes you feel like you are receiving a present rather than a purchase.’

READ: Rites of Beauty – Liz Earle

If you’re unfamiliar with Liz Earle, here’s a quick low-down. Liz, an ex-beauty journalist, and her business partner Kim Buckland, had a vision in 1995 for an effective skincare range using naturally-active botanical ingredients – rather than a face-full of chemicals as was the only option back then. Today, their superbrand is available worldwide, consistently selling out on QVC, and includes a perfect roster of products. From award-winning cleansers and facial oils to shampoos, concealers and lipsticks – every product is vegetarian, never tested on animals, ecologically packaged and (when possible) certified organic and preservative-free. There’s now a London flagship store and spa (with incredible facials) and their excellent customer service has been a priority since day one.

‘We’re absolutely thrilled with the survey,’ says Julie Tatarczuk, Liz Earle Beauty Company CEO. ‘Customer service has and always will be at the heart of our brand and we feel so honoured to be personally recognised by our loyal customers.’

Click onto uk.lizearle.com to see what all the fuss is about. 14,000 shoppers can’t be wrong.

Rasul Bailay
New Delhi : Two years after entering India in 2006, Nando’s closed its three franchise restaurants in Mumbai and exited the country. The chain then reworked its strategy and returned in November 2012, this time opening one outlet in New Delhi’s DLF Promenade mall. Over the year, it tweaked the approach until it found a successful operational methodology.

This it seems to have achieved, with people queuing up for tables at the restaurant. Nando’s New Delhi restaurant is one of its three busiest around the world (Dubai and Qatar being home to the other two) with about 700 people dining daily and about 20,000 to 22,000 every month, said Deepinder Batth, chief executive of the company in the National Capital Region.

The chain, famed for its Peri Peri chicken, is ready to expand in India, by opening its second outlet next week. The restaurant will be located at the DLF Hub in Cybercity in Gurgaon. Nando’s then plans to open four to five restaurants in the National Capital Region in the next 12 to 15 months, Batth said.

So what did Nando’s do right in its second outing in India?

Nando’s opened three restaurants in its first phase in India but due to the high cost of real estate in India, and especially in Mumbai, then franchisee Indage Restaurant and Leisure restricted the area to about 2,000 sq ft each, smaller than the global average size of about 3,500 sq ft. In line with its global positioning, Nando’s was pitched as a fast food chain. But this confused patrons because Nando’s pricing was higher than that of McDonald’s.

“There was a lack of clarity on whether we were a fast food joint or a casual dining restaurant,” said Batth. “People asked, if you are a fast food joint, how come your burgers are expensive compared to that of McDonald’s?”

In its second coming, Nando’s decided to eschew counter service and switched completely to waiters and table.

“The culture of India is such that we cannot do dine-in restaurant without serving food on the table,” Batth said.

The team chose a large 4,500 sq ft space with elaborate and comfortable seating in DLF Promenade Mall in Vasant Kunj. It was an almost instant hit although getting in often meant a frustratingly long wait with service agonisingly slow at times.
This time around, the restaurant’s interior was designed by a Nando’s team from the home base in South Africa. The chain’s stores in Mumbai had been designed locally.
Most importantly, over the last one year Nando’s has developed vegetarian versions of almost 40% of its traditional menu items. Also, the kitchen was installed in the centre of the restaurant unlike in Mumbai, where they were tucked away out of public gaze.
“You could see the flame flying in the kitchen and you could see the entire process sitting anywhere in the restaurant,” says Batth. Nando’s was born in 1987 when Fernando Duarte started a Portuguese restaurant in the suburbs of Johannesburg in South Africa. Today, Nando’s runs about 1,000 restaurants in 34 countries.

British luxury brands including Burberry, Stella McCartney and Jimmy Choo are among those to have signed on to a new Azerbaijan luxury development in the country’s capital city, Baku. Scheduled to open in the spring of 2014, the luxury fashion mall is part of a larger development of high-end business accommodation and prestigious residential apartments situated on the renowned Neftchilar Avenue, already established as the premier address in Baku for luxury retailing.
The new344,445 square foot centre, Port Baku will be located overlooking the Caspian and is being designed by leading British architects Broadway Malayan. A number of other luxury labels including Ralph Lauren, Valentino, and Chloé have signed leased to open stores, as well as Giorgio Armani, Emilio Pucci, Diane von Furstenberg, and Bally.
With almost 90 percent of the retail space inside the development already taken, designers are seeing the growth potential of Azerbaijan, which was named by The Economist as the second fastest growing economy of any country between 2000 and 2010 based on GDP.

British luxury labels sign up for luxury Azerbaijan mall

Ian Ferguson, director of shopping centres for Pasha Construction explains the significance of the prestigious Port Baku development to the region: “The luxury market is already well-established in Baku and has shown exceptional growth over the last few years as a solid local market is reinforced by an influx of affluent shoppers visiting Azerbaijan from the surrounding region, including southern Russia, Georgia and Iran.

“At Port Baku Mall we are providing local and international consumers with a new premium shopping experience, bringing together flagship stores of the most desirable brands in one superb location offering easy access and ample parking for drivers.”

Port Baku is the latest in a number of world-class developments by Pasha Construction, part of the Pasha Group, one of the largest and most established companies in the Republic of Azerbaijan. In addition to a shopping centre, the development also includes Port Baku Towers, which has already been completed and is occupied by many of the city’s most influential businesses including the headquarters of BP.

It is the third time that the landmark hotel has enlisted a designer to decorate the huge Christmas tree that sits in the main lobby throughout the festive period – Alber Elbaz of Lanvin and John Galliano for Dior have all previously participated while London florist McQueens were bestowed the honour last year.

This year, it’s the turn of Sicilian design duo Domenico Dolce and Stefano Gabbana – regular guests at the hotel – and they have taken their Italian heritage and run with it for the design.

Hand-crafted traditional Sicilian puppets, called Pupi, will sit beneath the tree, which will be adorned with hand-painted Italian festive glass baubles and framed by a bespoke multicoloured ‘luminarie’ created in southern Italy.

“When we think of London we always think of Claridge’s and of its typically English atmosphere that fascinates us and makes us fall in love with the city every time as if it were the first,” say the designers. “Our Christmas tree isn’t only a celebration of Christmas as we celebrate it in Italy, but it’s at the same time a tribute to the artisanal Italian tradition, the same that we love to export worldwide with everything we do”.

PRIVATELY owned and family-operated business Cape Union Mart Group will expand its footprint in South Africa, Namibia and Botswana, CEO Andre Labuschaigne said on Friday.

The company’s brands include Old Khaki, K-Way, Sparks and Ellis, a uniform company, and Poetry — a lifestyle concept store for women.

“We are aiming for 200 stores by 2016. We believe in South Africa, Namibia and Botswana. We are not going further north of the border in the foreseeable future,” he said.

Cape Union Mart, which this year celebrates its 80th anniversary, was founded in 1933 by the late Philip Krawitz, the grandfather and namesake of the current chairman.

The company started out as an army-and navy-type store and today employs more than 2,000 people. In addition to the nearly 80 Cape Union Mart stores in South Africa, the group owns and operates 20 Poetry outlets and more than 40 Old Khaki stores.

Last year, the group invested R2m in equipment and machinery for its K-Way brand in order to gain an edge over the influx of cheap imports from East Asia. These imports continue to put strain on domestic clothing, textile and footwear makers.

K-Way, which produces a range of outdoor clothing and gear, also increased the size of its factory’s production floor by 700m² at a cost of more than R3m, to enhance design and production capabilities. The factory, located in Tokai, Cape Town, makes 450,000 garments a year.

South African manufacturers are competing with the Asian producers’ cut-throat prices, which are mainly a result of low labour costs, large production runs and subsidies offered by states.

“There is one thing that all manufactures are crying for in South Africa and that is for the government to stop levying import duty on fabric.

“Because we don’t have a textile industry in South Africa, we can’t buy locally and if we could import that fabric duty free, we could be much more competitive and it would create more jobs,” Mr Labuschaigne, who joined the group in 2011, said.

The company, which he said continued to see strong double-digit year-on-year growth in turnover and profitability, has also expanded its distribution centre in Montague Gardens, Western Cape.

Most retailers have been bemoaning the trading environment as consumers in the middle-to-low living standard measures battle rising utility costs, debt and a dearth of jobs in South Africa.

Philip Krawitz, chairman of Cape Union Mart, said the group’s understanding of its customers and its focus on value-for-money had been key in driving its success.

“Even during an economic downturn customers return because they are willing to spend money on durable, practical products that are well-priced,” he said.

Sun European Partners, which bought Bonmarché from administration in 2012, is to take the womenswear chain public in London’s alternative stock market, the Alternative Investment Market (AIM) in November. “The success and strong performance enjoyed by the business over the last 18 months… makes this an opportune time to bring the company to AIM [London’s junior share market],” said Bonmarché’s chief executive, Beth Butterwick, in a statement Friday.
An affiliate of Sun European Partners, which bought the company out of KPMG administrators in January 2012, will sell shares to UK institutional investors, according to a statement issued on Friday.
At least 40 percent of the shares will be publicly traded after the initial public offering, which will take place in November, Bonmarché said.

Bonmarché to offer 40 percent of its issued share capital

Bonmarché’s owner expects to offer a minimum of 40 percent of the company’s issued share capital to investors in the flotation and to list on AIM in November.

The female fashion brand backed up its intention to float citing figures from the Office for National Statistics and retail specialists Verdict predicting that the number of women over the age of 55 – its target market – would be 16 percent higher in 2018 than in 2008, reported the BBC.

Bonmarché was founded in 1982 and bought by Peacocks in 2002. In 2012, it was acquired by Peacock Group and changed hands again in 2012 when the current owner – Sun European Partners – bought it from administration.

Sales at the apparel brand in the twelve months to March 30, came at 146.8 million pounds, with earnings before interest, tax, depreciation, amortisation and exceptional items (EBITDA) of 9.1 million pounds. As per the company’s last statement, same-store sales for the first half of the year went up by 13 percent.

Marks & Spencer’s turnaround effort has suffered a blow with the departure of a third senior womenswear executive in a year.

Gillian Ridley Whittle, the recently-promoted development and buying director, will join the Australian retail group Target, adding to the pressure on chief executive Marc Bolland. Analysts expect a drop in sales this quarter.

Her exit will heap more pressure on the chain as investors brace for its ninth consecutive quarter of falling general merchandise sales, which span clothing and non-food.

Ms Ridley Whittle’s departure follows the exit of Janie Schaffer – dubbed M&S’s “Knicker Queen” – who was hired to reinvigorate the underwear section but walked out as director of lingerie and beauty after just three months.

Ms Schaffer’s exit was followed by the departure of Cathy Haydon, who was head of merchandising, in September.

Ms Ridley Whittle had run lingerie temporarily since Ms Schaffer’s exit in April, and recently took up a strategic role in womenswear.

Everyone knows that the millennial generation is far different from its predecessors across the world, including in China, but what are the ways in which it differs?

Research firm JWT Intelligence has recently tackled that question in a new report out entitled “Meet the BRIC Millennials“, a comprehensive survey of millennials in Brazil, Russia, India, and China.

Look below to see five key characteristics of this generation in China in particular, which will help shed light on the future consumption habits of this vitally important demographic.

They’re bullish about their personal finances

According to the survey, a full 83 percent of respondents stated that they think their finances will improve within the next six months, while 93 percent agreed with the statement “it is important that I am financially independent,” the highest rate among all BRIC millennials.

However, the uncertain global economic environment prompted 76 percent to agree with the statement “my generation is being dealt an unfair blow because of global economic uncertainty,” and 68 percent said that their generation is struggling to find jobs.

Despite job uncertainty, Chinese millennials are incredibly business-minded: when asked what they would do if they had trouble finding a job, 74 percent of them said they would start their own business. Technology will likely play a huge role in their new ventures: a full 93 percent agreed with the statement “technology has put so many professional and entrepreneurial opportunities in front of me.”

They’re more inclined to spend than their parents

China is known for its high personal savings rate among its citizens, but it looks like the government’s efforts to encourage domestic consumption may be working for the younger generation. Sixty-five percent of respondents said that saving money is more important to their parents’ generation.

However, these consumers aren’t spending recklessly: 80 percent stated that spending wisely is more important than earning a lot of money, and only 25 percent said they’re buying more than they did two years ago.

“ 80% stated that spending wisely is more important than earning a lot of money ”
Social media is an integral part of their lives

More than half of Chinese respondents clearly see social media as a key part of their identity, agreeing with things like “because of social networks, I have become more self-aware of the image I put out both online and offline” and “it’s important my social media profile conveys a certain image of me.” Amazingly, 51 percent say that when things they post online aren’t shared or commented upon, they actually feel bad about themselves as a result.

Social responsibility is important

According to 63 percent of Chinese respondents, “a lot of people my age are seeking jobs that give back to society.” Eighty-three percent believe that “my generation tends to care more about improving the world than other generations,” and 90 percent say that their generation is thinking less about “me” and more about what “we” can do together to address global issues.

Chinese millennials are looking for education and work opportunities worldwide. Seventy-eight percent agreed that going to college abroad helps career prospects, while 55 percent said they would consider moving to another place for work.

Fifty-nine percent agreed that there is more opportunity for social mobility abroad than in China, but interestingly, this number was significantly lower than that of all the other BRICs millenials.

Meanwhile, global millennial cultural convergence is apparent in the fact that 74 percent of them believe they have more in common with young people in other countries than with old people in their own country.

Harrods, the London luxury department store that was taken over by Qatar Holding in 2010, has paid a £68.6m ($111m) dividend to the sovereign wealth fund, it was reported on Sunday.

The payout comes after the Knightsbridge store posted a 1.8 percent rise in pre-tax profit for the year to February, to an all-time high of £92.5m, driven by a 10 percent jump in sales, to a record £765.4m, according to the UK’s Sunday Times.

Last month, it was reported that Harrods is set to undertake a multi-million refurbishment as part of the Gulf state’s investment in the iconic brand.

The main focus of the revamp will be the famous escalator, which has been in the store for decades and is believed to have been the first of its kind in the UK.

The new refurbishments will be unveiled on November 4, a Harrods spokesperson said.

Qatar Holding bought the Knightsbridge store in 2010 for a reported £1.5bn ($2.4bn) from Mohamed al-Fayed.

Up until last year, Harrods’ new owners had spent £107.8m ($174m) upgrading the store.

Raffaele Jerusalmi, the chief executive of Italy’s stock exchange, advanced earlier this week that at least six luxury goods and fashion companies are looking to list in Milan in the first half of 2014. Not all of them will make it to the larger trading floor though, as some have shown interest in the small cap market.
Talkingwith press and other stakeholders during the “Luxury & Fashion 2013” event organised in Milan earlier this week, Raffaele Jerusalmi advanced some exciting news for those attending the road show organised by the Stock Exchange in collaboration with Italian Vogue in which 13 companies in the fashion and luxury goods, both listed and private, meet investors from Europe, America and Asia.
While not disclosing any names, Jerusalmi said that half a dozen of luxury goods and fashion companies are currently exploring their listing in Milan. A few are looking to quote on the exchange’s AIM market for smaller firms.

“Among the companies that have decided to go public, such as Moncler, there are other fashion companies that will come in the first half of 2014, of which we cannot give notice. Might be four or five,” he said, as reported by industry media.

Jerusalmi also noted there were around 131 companies currently in the exchange’s Elite programme, many of them luxury goods makers, which means the bourse’s operator is “creating a pipeline of potential listers.”

Almost half of fashion and luxury goods IPOs in the past four years have taken place in Milan, Jerusalmi recalled, adding that “We feel we have all the potential to become the reference market for the sector, even for companies based in foreign countries.”

E-commerce drive
Brown Thomas, Ireland’s premier lifestyle and fashion store and part of Selfridges Group, has chosen Venda, one of the world’s leading innovators and providers of digital commerce solutions, and Onstate, the creative commerce experts, to launch its first online and mobile commerce sites.

Venda’s platform and Onstate’s expertise will enable Brown Thomas to extend its range of luxury products online and on mobile for the first time.

Since opening its doors in 1849, Brown Thomas has strived to deliver excellent customer service and become synonymous with the world’s best luxury brands, from Alaia to Zegna. The addition of an online and mobile commerce offering will enable consumers to purchase from Brown Thomas’s wide range of luxury brands, with next day delivery across Ireland and access to loyalty schemes also available. Consumers will also be able to enjoy the high level of customer service and luxury experience they have come to expect in-store through these new channels.

The new website will replace the existing non-transactional site in November, and will offer Brown Thomas’s wide range of beauty products, with accessories, fashion, and footwear to follow in the next year.

Sam Bain, multi-channel director at Brown Thomas, said: “At Brown Thomas we are at the beginning of our multi-channel journey, as such we were looking for partners with the right experience and capabilities.

“In Venda and Onstate we have found businesses that have fantastic experience with luxury and fashion brands, with a SaaS proposition that provides scalability from a standing start and cost-effectiveness. The strength of the uptime performance of Venda’s platform was also an important factor in our decision, as it takes the pressure off our team and means they can focus on creating great content for our customers.

“Consumers no longer see mobile as simply an add-on anymore, so Venda’s responsive web design capability will ensure our customers have a great experience on their phone or tablet, just as they would online or in-store. This will allow us not just to add an ecommerce platform, but to become a truly multi-channel luxury retailer.”

Eric Abensur, CEO at Venda, said: “It’s great to be working with a household name like Brown Thomas and a business that is synonymous with great customer service and luxury brands. In expanding its store to online and mobile Brown Thomas identified an opportunity to grow its business and create even stronger relationships with its customers. Retailers that don’t evolve and embrace the e-commerce revolution could find themselves struggling to compete in an ever competitive market. This deal also marks another partnership for Venda with Onstate, so we’re excited to work together to deliver a creative commerce platform for Brown Thomas.”

Chris Marshall, founder and e-commerce director at Onstate, said: “We are excited to have the opportunity to work with Ireland’s premier luxury retailer and have the opportunity to take the first steps to a multi-channel commerce platform together. We have worked with Venda previously and its platform takes much of the hard work out of creating these sites, allowing us to be as creative as possible in delivering a luxury user experience.”

Shares of Google rose 6 percent to $941.25 in after-hours trading on Thursday after it reported a 23 percent rise in revenue from its Internet business, excluding fees paid to partners, of $10.8 billion in the third quarter.

“They were able to grow their revenue pretty substantially, particularly in their own websites, in spite of having lower overall ad prices,” said JMP Securities analyst Ronald Josey.

Google’s business, like rivals Facebook Inc and Yahoo Inc, has come under pressure as more consumers access its online services on mobile devices such as smartphones and tablets, where advertising rates are lower than on PCs.

Paid clicks increased 26 percent year-on-year during the three months ended Sept. 30, while the average cost-per-click – the price that marketers pay Google when consumers click on their ads – decreased 8 percent.

“That’s the key story, their ad volume growth is outpacing the decline in cost-per-clicks,” Josey said.

On Thursday, co-founder and CEO Larry Page told analysts he will no longer be joining the company’s regular earnings conference call. He did not give a reason.

Page, who with Sergey Brin conceived of what is today the world’s most-used Internet search engine, is not known for assiduously courting Wall Street investors. And this year, Page revealed that his vocal cords are partially paralyzed as the result of a rare medical condition.

Shoprite chief executive Whitey Basson has moved beyond blaming the usual suspects of unions and labour legislation for South Africa’s economic woes and has lashed out at the “declining” manufacturing sector for its lack of innovation and competitiveness.

In his chief executive’s statement in the latest Shoprite annual report, Basson says he is concerned about the decline of manufacturing and also about “its lack of innovation and competitiveness”.

“Many manufacturers complain that due to high input costs they cannot compete with imports and therefore beseech the government to limit those imports by imposing higher duties on imports.”

Basson says this attitude places retailers in a difficult position because the people employed in manufacturing, who are at risk of losing their jobs, are customers of the retailers.

“The dilemma is that at the same time, the retailer owes the people of this country the opportunity to buy what they need at the lowest prices – 50 million people cannot be held to ransom by manufacturers that are unable to compete effectively in a world market.”

In recent months the government has approved increased duties on imports of both chicken and sugar in a bid to protect those industries from foreign competition.

While industry players have argued that the increased duties are needed to compensate for what is tantamount to “dumping” by exporting countries, a number of analysts have pointed to the low levels of investment in the local sugar and chicken industries as contributing to their limited ability to compete.

At the Astral Foods annual general meeting earlier this year Chris Logan, an analyst with Opportune Investments, criticised the management for paying out dividends instead of investing in new capacity that would lower production costs.

Basson criticises the government for not doing more to enhance the business environment. He describes the trading environment for the 12 months to the end of June as “disappointing” and notes: “The country’s low economic growth rate created many challenges for the retail industry, a situation exacerbated by the government’s sluggish pace at creating an environment in which business could flourish. At the same time, a lack of job opportunities increased the dependence of millions of South Africans on government grants, of which the annual increase did not keep up with inflation.”

Basson says the group was able to compensate for the disappointing trading environment through its “substantial presence” in other African countries where growth rates in excess of 5 percent were being achieved. “Whatever the difficulties of doing business on the continent, it provides us with enormous potential for future expansion at potentially higher returns than what we are achieving locally.”

Last week Woolworths chairman David Susman said there was “deep concern” within business about the “populist legislation being imposed on commerce in South Africa”.

Susman made particular reference to restrictive labour and trade practices. Despite the difficult environment, Woolworths was able to report a 27 percent hike in earnings, a 50.7 percent return on equity and an 18 percent increase in dividend payments to shareholders. Chief executive Ian Moir was paid R27 million.

At Shoprite, earnings and dividends were up 11 percent during 2013 while return on equity was squeezed back to 20 percent. Basson received R50 million in remuneration.

In his Shoprite chairman’s statement, Christo Wiese refers to the attractive opportunities in Africa but describes as an embarrassment the fact that on the continent, with so much prime agricultural land, 37 of the 54 countries import more food than they export.

On employment Wiese says the group employed an additional 9 201 people during 2013, bringing the total to 111 338.

Wiese says the group’s selection criteria for staff rank attitude higher than skills. “Over the years we have learnt that we can, through training and guidance, provide people with the skills they need. Attitude is another matter.”

EMKE Group boss Yusuffali MA has topped the Arabian Business Indian Power List for the fourth successive year. Published on Sunday, the retail king behind the hugely successful Lulu Hypermarkets chain of stores took the top slot ahead of food giant Feroz Allana.
Standard Chartered banking boss V Shankar came third, ahead of healthcare boss Dr BR Shetty, with legendary investor Ragu Kataria completing the top five. Ashish Mehta was the highest placed lawyer at number seven, with Sunil John leading the way for entries from PR and Media, at number 14.
The list was propped up by Geebee Group boss GB Jethwani in 100th place.

This year’s list also featured a record 11 female entries, with 20th placed Zulekha Daud leading the way, ahead of Jumbo Group boss Vidya Chhabria ranked 39th. Diva Modelling founder Nicole Larsen made her first ever appearance in the list in 52nd place.
Arabian Business Editor Ed Attwood said: “The contribution of the Indian community to the growth of the GCC has been nothing short of spectacular, and everyone on this list has played and continues to play a major part in that story.”
A gala dinner is being held on October 28th at The Conrad Hotel in Dubai to celebrate the list, with Indian cricket legend Sunil Gavaskar appearing as the guest of honour.

Dubai Duty Free said on Thursday that its sales for the first nine months of 2013 totalled AED4.65bn ($1.27bn), an increase of 12 percent on the same period last year.

The airport retailer said in a statement that the figures put it on target for year-end sales of AED6.6bn.

It added that strong growth was recorded across the terminals at Dubai International, with sales in Terminal 3 rising by 17 percent to AED2.94bn and accounting for 63 percent of total turnover.

Terminal 2 saw sales rise by 22 percent to AED352m in the first nine months of the year while Terminal 1 recorded nine month sales of AED1.3bn.

Arrivals sales across all three terminals rose by 14 percent to reach AED457m, 10 percent of total sales.

Colm McLoughlin, executive vice chairman of Dubai Duty Free said: “We are having a terrific year in terms of sales and we are looking forward to ending this 30th anniversary year on a high note.

“Concourse A. which opened in January 2013, has been a great and much needed addition to Terminal 3 and the expansion programme in Terminal 2 is coming to a conclusion shortly.

“We will embark on a renovation programme in Terminal 1 early next year and of course we are opening a 2,500 square metre retail space at Al Maktoum International Airport later this month, so things are keeping us busy.”

Category wise, perfumes, liquor and gold retained the top three positions with Perfumes in particular showing strong growth (17 percent) to AED738m.

The retailer now has 6,000 employees and of the original 100 staff, 44 remain in active service and are referred to as the “pioneers”.

Punk-boot brand Dr Martens is in exclusive talks with private equity group Permira about a £300m sale of the business, two sources close to the deal have said

Negotiations are advanced with a sale potentially being announced by the end of this month, the sources said.

R Griggs, the British family which own the brand, have been looking for some time for an exit from the business after 50 years of ownership. The British shoe-brand, which was first explored a failed sale 15 months ago in a process which Permira did not take part in, the sources said.

Permira is said to have had a close-eye on the company since the previous sale was abandoned after a mis-match between price expectations.

Permira willl be required to pay a separate royalty fee to the brand inventors’ families, Dr Klaus Maertens and Dr Herbert Funck, after a licence deal was renegotiated last year. Under the licence terms the buyer will have to pay a set 2.5pc of sales up to £200m a year and a further 2pc for sales above that.

David Suddens, Dr Martens’ CEO, is thought to be keen to retain a management role, although decisions are still being finalised.

The lucrative Asian market is seen as one growth driver for the business and needs an investment injection, one of the sources said. Sales in the US account for just under half of the company’s revenues, according to the most recent figures.

The shoe’s legendary rubber air-cushioned sole was first invented to protect a ski-related foot injury sustained in 1945 by Munich-based Dr Maertens. The company initially used salvaged rubber from old World War II airfields in Germany. Bill Griggs, a shoemaker from Northampton, bought the rights to the brand from the German duo. After anglicizing the name to Martens, the first eight eyelet boot came into UK production in 1960.

The shoe was instantly adopted by British youth and sales boomed in the 1970s after footwear was adopted by the punk movement, most notably the Sex Pistols.

After a few years of struggling sales in the early 2000s the tough-boot has made a come-back, helped by celebrities known for enjoying controversy such as Rihanna and Miley Cyrus.

The shoe brand reported full year revenues of £110m two years ago and pre-tax profits of £15.3m.

The CEO of Victoria’s Secret parent L Brands Inc. blasted Coach on Wednesday for seeking “easy money” by becoming a discount outlet, the Wall Street Journal reports.
“Coach became a discount outlet,” L Brands CEO Les Wexner said at an analyst meeting in New York. “They cut their own throat. The outlet business is easy money, [but] discounting yourself is the beginning of the end. I can’t find the exception. It’s hard to have a dual identity. Outlet doesn’t build a brand. We don’t milk it.”

Coach’s net income dropped a staggering 12% in the second quarter as the luxury handbag maker faces intense competition from Michael Kors, Kate Spade and Tory Burch.

Coach’s outlet stores have grown to 60% of its retail sales in North America from about 30% in 2006, The Journal reported in July. The outlets have become more profitable for the brand than its full-price stores, bringing in about $600 more in sales per square foot.

Wexner said Wednesday that L Brands is moving Victoria’s Secret in the opposite direction with plans to close one of the lingerie brand’s four outlet locations.